According to Pubs of Ulster, at least 50 jobs have already been lost across 16 premises and they estimate 200-300 more lay-offs could be made in the coming days.
The organisation says the industry has suffered heavily as a result of disruption arising out of the ongoing flags protests across Belfast and further afield.
One publican has reported a loss of £95,000 before Christmas and a further £60,000 after the holiday period, while another publican reports trade falling by 54% last week alone.
Pubs, restaurants and hotels all rely on people leaving their homes, so if people don't go out, we lose out.
Colin Neill, Pubs of Ulster
"The nature of our business makes us very dependent on predictable cash flows and the truth is we have been very badly affected for a sustained period of time," Colin Neill, chief executive of Pubs of Ulster, said.
"We have now reached crisis point and this week jobs have been lost.
"Looking ahead, we are predicting that 200-300 casual and on-call jobs across the city centre will be lost before the end of the week. The industry is fighting for survival and we need action now."
The flag protests, which have been marred by violence, have been ongoing since the start of December and continued across the traditionally busy Christmas period.
A delegation of representatives from the hospitality industry has already met with Enterprise Minister Arlene Foster earlier this week to voice their concerns.
"The intention of the meeting was not to discuss the rights or wrongs of the protests," Colin Neill, chief executive of Pubs of Ulster, said.
"Instead, we wanted to use the meeting as an opportunity to voice our concern for the future of local businesses, especially within the hospitality sector, and look at how we can work together to try to get through the current difficulties."
According to Pubs of Ulster, trade amongst pubs, restaurants and hotels has dropped by an average of 30%, and in some cases by as much as 55%, over recent weeks.
Representatives have expressed fear that there is no sign of an improvement in the situation.
"Our figures speak for themselves and it is clear that businesses cannot operate for very long in these conditions," Mr Neill added.
"Whilst we obviously need a political solution to the situation, we are now at a point where something has to be done and action needs to be taken to help the struggling evening economy.
The hospitality industry has a very important role to play in giving Belfast the kind of 'buzz' and atmosphere that saw the city being voted one of the world's top destinations for 2012.
Enterprise Minister Arlene Foster
Arlene Foster said she had welcomed the opportunity to meet with the retail licensed trade representatives and that she shared their frustrations.
"We spent a lot of time last year building up the image of Northern Ireland with our hugely successful NI2012 campaign," she said.
"I will do everything I can to ensure a positive message continues to be delivered, because Northern Ireland is still a great place to live, work, invest and visit."
Belfast city centre traders have also expressed frustration and held talks on the issue at a local hotel on Wednesday night.
Social media users have embraced campaigns to support local businesses, with Twitter hashtags including #PositiveNI, #OperationSitIn and #TakeBackTheCity having featured in recent days.
Snow Patrol's Gary Lightbody has supported the movement named after one of his band's songs.
"Very proud our song about Belfast is being used as part of the campaign for peace and sanity," he tweeted on Thursday.